The Benefits of a Registered Agent

A corporate entity of any kind is what the law refers to as a “legal fiction.” It technically does not exist, at least not on its own. It is a fiction; a story that must be told and re-told. When the story stops being told, the corporation becomes a pretense and all the things that should have been the responsibility of the corporation become the responsibility of the people who should have been telling the story, namely the corporation’s directors, officers, and managers. This includes all the corporate liabilities, such as debts, audits, contracts, and most importantly, lawsuits.

An essential thread of the corporate story—and one that is often overlooked—is the “registered agent.”1 If the corporation were an office, the registered agent would be the secretary who answers the door. Without a knowledgeable and focused registered agent, the corporation looks more and more like a lie; leaving people standing outside knocking incessantly tends to show there’s really no one home.

A registered agent, by law, has certain legal liability on behalf of the corporation. A registered agent is responsible to receive legal service of process, in addition to any other state, federal, or local agency papers or notices. Ideally, the registered agent should be an attorney who is an active member of the state bar, since most states require that qualification and most, if not all, of the papers which will be delivered to the registered agent will be legal in nature. Some documents such as lawsuits and annual reports will also contain important deadlines that could incur significant liability on the part of the corporation if not met. To minimize the chances of important legal papers being lost, the registered address of the corporation should be a law office or other location with a system in place for recording all incoming mail and facsimiles.

There are several additional benefits to having a qualified registered agent. Many times legal service of process is delivered by local law enforcement. Having a police officer show up at a church or non-profit can not only be very nerve-racking but can also be disruptive to ministry or business operation. A registered agent would easily be able to receive these documents and ensure they are forwarded promptly. Similarly, if a church or non-profit operates out of a home or private location, they may not want their address listed publicly. A separate registered agent can list their office and avoid disclosing a private location. This is also helpful if the organization intends to move frequently as it grows, because most states require some sort of fee, along with an official filing, to change the registered agent’s address. Keeping a consistent third-party registered agent address allows for change and growth without having to keep up with all the filing requirements and associated fees.

Spending $200 a year on a third-party registered agent, such as Simms Showers, is an investment that will help tell a consistent story about the corporate existence and bring peace of mind to operations. It is an important, albeit mundane, element in creating effective tools and acting as a responsible steward of ministry resources.Disclaimer: This memorandum is provided for general information purposes only and is not a substitute for legal advice particular to your situation. No recipients of this memo should act or refrain from acting solely on the basis of this memorandum without seeking professional legal counsel. Simms Showers LLP expressly disclaims all liability relating to actions taken or not taken based solely on the content of this memorandum. Please contact Robert Showers at hrs@simmsshowerslaw.com or Daniel Hebda at djh@simmsshowerslaw.com for legal advice that will meet your specific needs.